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liability for the unpaid tax resulting from respondent’s
reallocation of her withholding credits.3
As directed by section 66(c), the Commissioner has prescribed
guidelines in Rev. Proc. 2003-61, 2003-2 C.B. 296, modifying Rev.
Proc. 2000-15, 2000-1 C.B. 447, that are to be used in determining
whether it is inequitable to hold a requesting spouse liable for
all or part of the liability for any unpaid tax or deficiency.4
Sec. 1.66-4(b), Income Tax Regs. The requesting spouse must
satisfy five conditions (threshold conditions) before the
Commissioner will consider a request for relief under section
66(c). Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297.
Respondent concedes that petitioner satisfied the threshold
requirements.
3Reallocation of the withholding credits affects the final
balance due from petitioner more than the treatment of the
community income. Petitioner claimed a credit of $38,354 for
withheld taxes, as shown on her Form W-2, Wage and Tax Statement.
Respondent proposes to allow only $25,569.33 of this amount, a
difference of $12,784.67. In contrast, the deficiency in tax
which resulted from the allocation of a portion of Dr. Geaccone’s
income to petitioner was $5,921.
4Rev. Proc. 2000-15, 2000-1 C.B. 447, was superseded by Rev.
Proc. 2003-61, 2003-2 C.B. 296, which is effective as to requests
for relief filed on or after Nov. 1, 2003, and for requests for
relief pending on Nov. 1, 2003, as to which no preliminary
determination letter had been issued as of that date.
Petitioner’s application for relief was filed after Nov. 1, 2003,
in August of 2004. Respondent issued a notice of deficiency on
Jan. 20, 2006.
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Last modified: November 10, 2007